Wealth Management and Its Importance

Understanding Wealth Management and Its Importance

You may have heard this term used once or twice before by well-heeled individuals who talk about how they’ve managed to amass such prosperity. When asked how they are able to maintain their high net worth and continue to increase it, they usually mention the term wealth management. What is wealth management? Why do the rich rely on it when it comes to their financial stability?

Defining Wealth Management

When you string together these two words – wealth and management – it is pretty easy to see what the phrase means. It is literally the management of wealth. It is a service that is offered by professionals who help their affluent clients take care of their wealth. The primary goal of such a service is to help clients grow their wealth through a variety of sub-services that include portfolio management, financial planning, tax planning, and many more.

This particular service also helps clients understand what is needed when it comes to taking care of their finances and their assets. Since each client has different needs and expectations, their wealth management strategy can differ greatly from those made for their peers. The wealth manager makes sure that each client who requires such a service gets the kind of assistance they want and need with the help of customized services and advice.

Who Requires the Help of a Wealth Management Professional?

One question people ask when it comes to wealth management is how much money do you need to have for you to need a wealth management company’s help? The answer is pretty simple. You need to have a lot of money before you can be considered as someone who is in need of a wealth manager. Basically, you have to have a high net worth before you can actually say you need help with managing your wealth.

An individual who has a high net worth usually has cash upwards of $1 million. People who belong to this category are called HNWIs or high net worth individuals. HNWIs are also defined by the SEC as accredited investors. These are people who earned a minimum of $200,000 for the past couple of years.

The HNWI status actually comes in three distinct categories – high net worth, very-high net worth, and ultra-high net worth. While the first category requires you to have at least $1 million in liquid assets, the second one requires you to have at least $5 million. To be considered an ultra-high net worth individual, you need to have at least $30 million in cold hard cash (Read more on Asset Allocation).

What Does a Wealth Manager Do?

If you are in any of the three HNWI categories, then you should definitely considering hiring a wealth manager. There are many wealth management companies who have trained and experienced professionals who can help you handle your riches for you. In fact, a lot of companies focus only on managing the finances of those who belong to the HNWI category.

A wealth manager is essentially a financial adviser that does more than just offer investment advice to their clients. These professionals offer their HNWI clients services that cover all aspects of their financial life. Apart from the aforementioned services, they also help with tax and accounting needs, estate planning, retirement planning, and even family legacy planning (Read more on Growth vs. Value Investing).

How to Choose the Right Wealth Manager

To ensure that you get the best wealth manager to help you with your needs, there are a few things to consider. These include the following:

Their Certifications – Check to see what types of certifications a wealth manager has. The best ones are usually certified public accountants (CPA) with Certified Financial Planner (CFP) and Chartered Financial Consultant (ChFC) certifications. When a wealth manager has all three, it means they are at the top of their field and have undergone the necessary training and exams needed for these.

Track Record – Certifications are only the tip of the iceberg, so to speak. To get yourself a good wealth manager, they should also have a sterling track record when it comes to how well they have been serving their clients.

The Firm They Work With – More-often-than-not, the best wealth managers are associated with a reputable wealth management company. Wealth management companies, after all, hire only the best and the brightest to work for them to ensure that their high-level clientele are happy with how their wealth is being managed. To ensure that you get one of the best in the industry, you should try to check out the top wealth management companies around.

Your location – If you are looking for a wealth management firm to work with, it is probably advisable that you find one where you live. If you live in the US, find a wealth management company in the US to help you. If you live in Seoul, Korea, a wealth management company in Seoul Korea is your best bet. This will help make it easier for you to get in touch with them quickly if you need some last minute advice on an investment or if you are facing a financial decision that you can’t make your mind up on.

The Importance of Wealth Management

Some people may believe that a financial adviser and wealth manager is just someone you pay to give you advice you can find yourself. What they don’t realize is that these professionals can do more than give you advice on your investment. They offer a lot in terms of the following:

Overall financial advice – Wealth managers and wealth management companies give clients more than just information on which stocks to invest in or what to add to their portfolios. They offer a whole plethora of services that help a client meet their financial goals.

Remove the guesswork from all financial worries – Need help with your taxes? Want to learn how to set up your retirement fund? Want to know how you can become a philanthropist? Your wealth manager can help you with all of these.

The Bottom Line

If you are someone who belongs to any of the three high net worth categories mentioned earlier, you should definitely find a wealth management company to help you. Not only will you get the help you need to maintain and increase your wealth, but you also get a professional whose aim is to help you manage and figure out all of your financial conundrums.

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Global Asset Management was founded on the principals of providing excellence in customer service and wealth management. Many years later our approach has remained the same. We pride ourselves on our long-term and multi-generational relationships.

Global Asset Management was founded on the principals of providing excellence in customer service and wealth management. Many years later our approach has remained the same. We pride ourselves on our long-term and multi-generational relationships.